> In labor circles, “chickenization” refers to exploitative working arrangements that resemble the plight of the American poultry farmer. The U.S. poultry industry has been taken over by three monopolistic packers, who have divided the nation up into exclusive territories, so that each chicken farmer has only one buyer for their birds.
> Farmers are “independent small businesspeople” who nominally run their own operations, but because all their products must be sold through a single poultry processor, that processor is able to exercise enormous control over the operation. The processor tells the farmer which birds to raise, as well as what the birds are to be fed, how much, and on what schedule. The processor tells the farmer how to build their coops and when the lights are to go on and off. The processor tells the farmer which vets to use, and tells the vets which medicines to prescribe.
> The processor tells the farmer everything…except how much they’ll be able to sell their birds for. That is determined unilaterally when the farmer brings their birds to market, and the payout is titrated to the cent, to represent exactly enough money for the farmer to buy birds and feed and vet services through the processor’s preferred suppliers, and to service the debts on the coops and light and land, but not one penny more.
In my experience, the processor is actually the one who owns the chickens (broilers). The farmer is essentially a baby-sitter for 6-7 weeks. The processor also owns the feed and the farmer gets paid on a feed-to-poultry conversion efficiency.
Variables like temperatures, lighting, ventilation rates, chicken house construction, and access/
density have well-established bounds to maximize pounds of poultry. The farmers have leeway to deviate from the recommendations, but they take on all of the risk in doing so. From the outside, it looks like a pretty oppressive relationship.
I've seen this referred to as a treadmill before. They get the farmers on a treadmill (loans for co-ops, equipment inputs) and once they're waking, they don't let them stop.
The craziest thing is this is well known trick, historically. In the 1800s there was a company run by a man that was both wholesale buyer of fish from fishermen and also supplied the mortgages for fishing boats. He was the only one for both in many small fishing communities and was universally hated for it.
The obvious thing to do is for the farmer to learn how to package their own chickens, then sell it themselves. The hard part of this should be the however-long-it-takes a chicken to grow + feed for the bird.
Since that isn't happening I'd assume that doing so has been made illegal by the regulators for some reason. Or that "chicken packaging" is wildly misnamed, because it sounds like something you can ... just do. People ate chickens for millennia without relying on 3 chicken packers.
I've had neighbours who keep their own chickens (curse them for the mice). It didn't look so hard a quasi-monopoly could form naturally.
Meat packaging isn’t something you can “just do.” The hard part is the equipment and manpower to disinfect a meat packing plant, which is done several times a day when in operation.
The reason regulators made it illegal is basic food safety. A meat packing facility - whether that’s an industrial plant or a small group of farmers in a commercial kitchen or whatever - is a hot and humid environment that is an ideal place for bacteria to grow. Now that’s going to happen anyway, but the public safety goal here is to minimize the bacterial load that transfers to the meat so that by the time it reaches the kitchen, the pathogens haven’t reached dangerous levels. That means an entire facility that’s designed to be sprayed down with a foaming disinfectant from wall to wall and crevice to crevice. Small groups of farmers simply can’t afford that and be competitive unless they’re already selling high end organic/free range/etc meat.
Before refrigeration, people ate meat right after slaughter or cured it. They grew the animals at so low an intensity that >80% of the population were sustenance farmers that lived a precarious life prone to starvation at any time. It just makes no sense to compare the infrastructure to feed hundreds of millions in a single country to small scale pre-industrial agriculture.
Which part of that is the tricky part? Spraying down a facility sounds straightforward. Killing bacteria in food products isn't particularly novel either; there are a lot of abattoirs around the world.
We're talking about farmers here. Having to do something a couple of times a day is not going to intimidate them. In an extreme case they'd hire someone and promote them to chief sprayer. These aren't challenges of the magnitude needed to get natural monopolies to form - they're standard style challenges for running a business in an industrial sector. Challenges that farm owners are quite acutely aware of.
If there are monopolies in the US chicken supply chain it is probably just everyday regulatory capture.
Butchers and meat markets that sell meat from locally raised animals is what this looks like.
The post above yours talked about this:
> "Small groups of farmers simply can’t afford that and be competitive unless they’re already selling high end organic/free range/etc meat."
It absolutely does happen. It's at small scale with higher relative costs, so it's only profitable as a specialty product. It can't compete with industrially farmed meat on price. This would be the range of the farmer who doesn't mind doing some things a few times a day and perhaps hires a helper.
Growing beyond the small scale requires the capital to build facilities and hire staff to run them while you're getting the operation going. You might need to be cutthroat on price to be competitive with existing players, so your revenue might not be great for a long while.
How much output do you think a farmer and a helper are capable of, versus a fully staffed modern industrial poultry farm?
I don't know anything about the chicken farming business, but I imagine if there was a simple straight-forward solution for the farmers to escape the stranglehold ("just build your own packaging plant and hose it down couple times per day") then the farmers would have already done it (or rather the situation wouldn't have occurred in the first place).
I don't say this to despair but to argue that we'd need more details before we can make recommendations how to fix things. Also, there is an obvious power imbalance here, but then it's important to identity the source of that power, so you can address the imbalance.
Cool, bro. I look forward to your wildly successful independent chicken farming business that grows so fast it acquihires all its competitors, since it's so easy and all
One word: “Distribution.” (The Graduate reference).
Distributors hold the most powerful hands in selling physical goods. You can’t sell something, if you can’t get it to market. These cartels (and you are hearing about them, all over. See "Big Potato"), are getting strangleholds on distribution. Amazon has turned distribution as a goad into a dark art.
That’s one reason that the Internet has upended so many industries. It’s democratized distribution of digital goods, and digital goods have become a lot more valuable (sometimes, because of the Internet). With digital goods, advertising and promotion are the new Distribution. You can’t sell your apps/music/images, if no one can find out about them.
Maybe an independent nonprofit can do the research and score food based on how much the pipeline taking it to your table is monopolized vs democratized.
There's probably hundreds of reasons, and a real answer is likely worthy of a graduate-level class. Like this one[0]. ;)
But we can start with the massive capital requirements of being a logistics provider. It's not something that many farmers, shopkeepers, or even medium-sized businesses could manage.
Big box stores want high volumes of a standardised products. This is hard to do for a lone farmer. It would be easier if they could sell to smaller supermarkets and butcher shops. Smaller supermarkets and butcher shops require walkable neighbourhoods and a vibrant down town; I call it the walkable neighbourhood theory of everything.
People who live in walkable neighborhoods will always drive to big box grocery stores to buy most of their chicken. The local butcher shops charge too much, and for busy families it's a huge hassle to have to visit multiple small shops for meat, dairy, produce, bread, etc. The big box stores are a huge time saver.
Bingo! It's also an antitrust thing but yes, look up the number of grocery stores in a northeast city 100 years ago vs now, it's mind boggling. Like at least 25x difference, maybe more, I can't recall.
> Since that isn't happening I'd assume that doing so has been made illegal by the regulators for some reason.
the lack of antitrust action and the price of entry in the market are a market failure modes that could bring in the same final result. Especially, if the packagers are forming exclusive deals with the distributors to prevent new entrants from achieving market share.
Theoretically a lot of stuff can happen. As a practical matter, this has to be regulatory. Eggs and chicken meat is a very well understood product and by nature a completely normal market. I've literally been offered chicken meat by roadside sellers who butcher them on the spot and cook up a meal; it is a bit gruesome but not outside the complexity of operation that one family can manage.
The part of the supply chain acting as a "monopoly" is too simple to replace. Someone can literally set up a new local butchery, buy directly from the farmers and the exclusive dealership network is broken. Probably need some know-how and a refrigerated truck. It is barely possible that the sort of monopoly structure being described could have been built over the entirety of the US without regulatory support. It'd require something approaching a mind control ray to keep the competition under control.
I believe the other comment saying that chickens are a bad business, competition would tear through the margins like a rooster eating a mouse. But a country wide monopsony on chicken purchases is absurd (unless the regulators are pushing it). If nothing else there are a bunch of low-income people who'd be happy to buy and butcher their own chickens if it cut out a middle man. It isn't feasible to build a natural monopoly.
Theoretically, it is possible to do anything of that, but what is missing from your business plan is selling a commodity product at scale on a competitive price. And if you somehow manage to do something like that, nothing stops the big player of your region from going to any of your clients and offer them dumping prices for ditching you or going to the local vendors of animal antibiotics and offering them premium price if they supply only chosen farmers thus squeezing you and your suppliers from both ends.
If you have a market with low margin and no differentiation between the offered stock, the gains are in size and it logically leads to a few players in the market so I doubt that the independent butchery has to be butchered and won't die of natural causes due to high costs or because a few of its partners are having a bad year.
The horrible thing is there can be lots of differentiation here. I grow my own meat birds for my own consumption, and they taste radically better than anything I’ve ever had in America. (Barring when I eat my friends’ birds.) Artisanal chicken could definitely be a thing, although it would definitely cost more.
I feel that regulatory capture is part of the problem - processing your own birds is safely is definitely possible, but what is required to process them for sale makes it so the local USDA butcher would have to charge as much for a chicken as for a sheep, and that’s just not viable.
You saying that consumers having meet on dumping/low prices is illegal? You are a communist! /s
You saying that a businessman is obliged to go against their own interest in stead of selling their meds to the highest bidder? You are a communist! /s
Free market without regulation is exactly that - freedom for those who can shape the market as they wish and no government violence necessary so it is kosher.
setting aside regulatory issues (and not commenting on whether any of that is good or bad), there is no universe where independent chicken farmers, solo or in a group, are going to compete with a group like Perdue in the industrial foodstuff space. maybe you get a cottage industry farmer's market business going or whatever but you aren't going to see Farmer Bob's Foghorn Leghorn Boneless Breasts on shelves in the local Wally World any time soon.
My impression (partly from reading Zephyr Teachout's excellent book Break Em Up) is that a farmer cooperative would not find the big grocery stores willing to carry their products. Those stores are intimidated by whichever of the big-3 processors is active in their region. Selling at a farmers market or mom & pop store may be totally feasible, but the grower had better be sure that was a long-term solution, because the big processor will blackball them for trying.
The only winning move is not to play. My grandfather tried his hand at chicken farming about 100 years ago (didn't go well). It was a bad business then and it’s a bad one now.
Yes, for some reason the term "monopsony" is little known, so much that the autocorrect tried to turn it into "monopoly". Maybe for not having a famous board game named after it.
But here it looks even worse as workers have to invest into equipment from the company that is of little use besides working for that company, making it borderline slavery.
Reminds me of the 1947 "Sixteen Tons" song. From German Wikipedia, translated by DeepL:
"According to Archie Green, the lyrics contain several key passages that Travis took from quotes from his family members. When asked about his health, his father reportedly replied that he couldn't afford to die because he owed his soul to the grocery store[7] where he had debts.
Sixteen Tons is a socially critical song about the sometimes inhumane conditions that American miners and their families had to live under in the past. This included wage slavery:
US miners were mostly paid not in cash but with tokens (scrips), some of which could only be redeemed in company-owned stores, as there were no other shops in the area;
local food supplies could only be obtained in these stores (company stores), which had a virtual monopoly and could therefore charge excessive prices;
The income and expenditure situation in the company stores, which was deliberately controlled exclusively in favor of the mine owners, resulted in unavoidable debts for the workers (Another day older and deeper in debt), which created a relationship of dependency similar to serfdom ("I owe my soul to the company store").
By the time the song was written, the miners' living and working conditions had already improved significantly, partly as a result of numerous strikes. Payment with tokens had been banned in 1938 by a federal law, the Fair Labor Standards Act of 1938. However, working conditions remained harsh and the memory of exploitative practices was still fresh in the minds of the families and communities affected."
I'm not sure why you transllated the german entry for an american song, but FYI, there's an english wikipedia version. "I owe my soul to the company store" is one of the greatest lyrics ever.
I don‘t know if "better“, but when I read Doctorow‘s blog article I was reminded of what I read about the 16 tons song on Wikipedia. I first read the English version and did not find what I was looking for. Then I tried German and there it was.
[nitpick] I think it's more the natural result of capitalism that is well-regulated only on the consumer side.
There are very few poultry processors largely because it is difficult and expensive to comply with consumer regulations and maintain food safety standards. That, in itself, is fine. But once you have very few (or only one) processor(s), there needs to be regulation on how they pay and treat both their workers and their suppliers. For the most part, there is neither.
Even regulated capitalism exploits. Surplus labor theory easily shows that even in the best of intentions, businesses absolutely must exploit the worker.
Even the local artisan bread-baker must pay workers less than their economic output. This isn't to say that the owner is exploitive and treating people with subsistence. But the pay/surplus split is still there as exploitation.
Reforming capitalism also doesn't work either. Hell, people can't get past page 30 of Adam Smith's treatise that discusses all the 'reforms needed' to instill capitalism. Turns out monied interests has always wanted to strip controls from the get-go.
No, its time to relegate capitalism to the dustbin of history. It was tried. As it lifted some up, more and more were ground into a gritty paste to feed the machine.
I don't know what to replace it with either. But whatever it is has to not have weird effects of infinite or 0 cost breakdowns (like copying software and data), and also aware of how to handle algorimthic labor (LLMs), amongst other concerns.
I’m all for critiques of capitalism, but it’s extremely unconvincing to say capitalism must go, but at the same time, you don’t know what to replace it with.
How are you so convinced that there is a better solution than capitalism if you can’t even articulate what that solution would be? How do you know that capitalism, for all it’s flaws, is not still the least-worst among an array of bad options?
This is usually the extent of online discussion. Everyone can agree that "just build more housing" is the answer to the homelessness epidemic, but nobody has anything to say about HOW to accomplish that. The person saying it can't build a house on their own, nor can the collective number of people who regularly eject that sentiment. So the question is "how do you get enough money in one place and apply it to building more housing". And that's the tricky part. Because as you keep asking "how" you eventually arrive at thorny problems like "how do you ensure that the politician you elect who promises to build more housing... actually does it?"
Lots of people are screaming at the top of their lungs about how to build more housing. Primarily through deregulation. Examples would be zoning codes, building codes, relaxed public comment and relaxed environmental impact assessments.
Deregulation is how we got into the mess of housing!
In fact, its the complete financial ideation of rentals and homes. That's what's even pushed 2 earner homes to even afford a house.
But those who have, can get a house loan, rent it out for 150% of the total mortgage and paracitize off the public. And nobody is the better, except for the paracite class (landlords).
Rent controls would also do a great deal. But we hear howls from the libertarian types over controls ala Adam Smith.
And progressive heavy taxation on more than 3 houses would also help the situation of houses being bought for rental or AirBNB purposes. Again, those are parasites on all of us.
Of course, all these mean housing number go down. And those who own a large stake will definitely complain. But these are steps that would help, alongside building more with a rent-controlled and reasonable cost.
And reforming how banks are required to provide loans (proof of X rent = proof of covering x mortgage). But really? This country is going the opposite way of the common person, and has been for decades. Now, that strategy has been ramped up to extremes.
> Deregulation is how we got into the mess of housing!
No, its not, restrictive zoning preventing actually building housing is. Which is why the mess is most acute in places which have the most such restrictions, and least in places that have less of them, wven when they are similar across all the dimensions you suggest are the real issues.
> Rent controls would also do a great deal.
At further reducing supply of housing by discouraging development? Yes, they would do a great deal of that.
Just to point that most places with a "housing problem" actually have a transit problem that will get even worse if one goes naively building more housing in single-use or empty land.
For starters, we have to acknowledge that capitalism isn't really a system as such. It's a set of ad hoc economic arrangements that each came into being as a result of historic evolution in many different societies, not some kind of coherent arrangement with any specific goal. If you were to have the same discussion 400 years ago, proponents of then-existing economic relationships would say, "how are you so convinced that there's a better solution than what we have right now if you can't even articulate what the replacement would be?".
There's not much else around. They don't know what else to do. Education/job training expensive. They've got loans to pay back, so they can't stop working to look for another job. They're on some government assistance program they can't afford to lose, but it comes with work requirements, so they can't retrain. The pay (including government subsidies) make it just bearable enough to keep from revolting. Etc.
Like what? Farm another product that has the similar problems? Row crop farm where generating a 2% return on investment over a decade span is considered a success? The response has been farmers dropping out of the business entirely, which ends up with some few people doubling down into larger operations, which only makes the problem worse as it is harder to pivot and makes processing and distribution even harder to divert away from the big controlling players.
It both sounds and is exploitive and bad, but to add color to this:
- poultry farming dictated by the big guys like this has been going on for decades.
- it’s provided structure for entrepreneurs in rural areas that had land, some money, and a willingness to work.
You could similarly say some fast food franchises or businesses can result in some form of exploitation, because not all result in good conditions and opportunities for growth of their workers.
Some may then extrapolate to say “all business is bad”, but it’s a spectrum; it may be providing work and income where there was none before, and that could be seen as a good thing. Or maybe the risks are too high and/or conditions are terrible, and that’s a bad thing.
I’d argue that finding that balance in business is why religion and capitalism spread together.
Hundreds of years ago, slaves kept spirits up through their religion and those exploiting them were more likely to keep working conditions better than they would’ve been because of their beliefs; slavery was pure evil, and religion didn’t enable that. It did improve a terrible situation, though I know the Marxists may say the opposite.
Today, religion is waning. If the people exploiting others do so without morals, we risk evil beyond what’s discussed in this article. We feel like technology must be there to save workers from being exploited, but it’s an uphill battle, and money/power may win.
> In labor circles, “chickenization” refers to exploitative working arrangements that resemble the plight of the American poultry farmer. The U.S. poultry industry has been taken over by three monopolistic packers, who have divided the nation up into exclusive territories, so that each chicken farmer has only one buyer for their birds.
> Farmers are “independent small businesspeople” who nominally run their own operations, but because all their products must be sold through a single poultry processor, that processor is able to exercise enormous control over the operation. The processor tells the farmer which birds to raise, as well as what the birds are to be fed, how much, and on what schedule. The processor tells the farmer how to build their coops and when the lights are to go on and off. The processor tells the farmer which vets to use, and tells the vets which medicines to prescribe.
> The processor tells the farmer everything…except how much they’ll be able to sell their birds for. That is determined unilaterally when the farmer brings their birds to market, and the payout is titrated to the cent, to represent exactly enough money for the farmer to buy birds and feed and vet services through the processor’s preferred suppliers, and to service the debts on the coops and light and land, but not one penny more.
This amount of scumminess is mind boggling.